Comparing savings accounts is a great option to ensure you can kick start your savings goals in the right way.
Whether you’re saving for your next holiday, to buy your first home, or building up an emergency fund for unexpected expenses, it’s important to make sure you have the best savings account to help you reach your financial goal faster. Since there are a wide range of savings account types - all with their own unique benefits and disadvantages - having the right type can make a huge difference for working towards your savings goals.
It’s important that you understand how you intend to use your savings account so that you can make the best decision. Here are some things to think about as you compare savings accounts:
Before you open a savings account, you should consider how much you intend on depositing to start with. Many savings accounts require you to have a minimum balance to earn interest or avoid monthly service fees. Always compare interest rates as you review your choices to make sure you get the best account for your needs.
Many savings accounts offer higher interest rates or other perks if you make regular deposits, and in some instances the higher bonus rate is only valid if no withdrawals are made within a certain time frame (e.g. each month). For some people, this can be an excellent incentive to keep you on track for bigger savings.
Some savings accounts charge interest or other penalties if you make a given number of withdrawals. Some accounts allow no withdrawals at all for a given term. If you have difficulty hanging on to your savings, such a policy can provide an added incentive to keep your money in the bank. Be sure you ask your bank to clarify its policy on withdrawals before you open your account.
Many savings accounts offer higher introductory rates. These rates are an excellent way to save money in the short term, and they can even help you build up interest more quickly on your long-term savings. If you do have long-term goals, be sure to take into consideration the interest rate after the introductory rate expires. This way you can gain a better understanding of the way in which your savings will grow over time, and make decisions on what to do with the funds after.
Term deposit savings accounts give you a locked-in interest rate over a specified period. That rate will not vary for the set term, no matter how often interest rates can change. If you don’t mind a little uncertainty, and the current rate is higher, you might opt for a savings account with a variable interest rate, where the rate may rise or fall depending on the market.
Savings accounts vary on how many times they pay interest into your account throughout the year. All other factors being equal, it pays to choose the account that pays interest the most often. Every time the bank pays interest into your account, that extra amount earns interest, too. Over time - and with the discipline to deposit and not to withdraw - such an account can amass quite a tidy sum.
No matter what you're looking to save money for, it's worth comparing your choices to find an account that best suits your needs. Here’s a quick guide to help you compare the various types of savings accounts you can open:
When you compare savings accounts to find the best account for your needs, you are more likely to achieve your savings goals. For assistance in finding the right savings accounts for you and your family, speak with a P&N Bank team member today.
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